May 19, 2012

Amware buys ParcelPort in bid to change e-commerce fulfillment model

Merger aims to bring B-to-B warehousing expertise, national structure to fragmented e-commerce fulfillment market.

By Toby Gooley

Amware Logistics LLC, a privately held provider of third-party warehouse and transportation logistics services, said it has acquired the contracts, personnel, and equipment of ParcelPort LLC. The acquisition combines Amware's strengths in business-to-business warehousing and distribution with ParcelPort's capabilities in the business-to-consumer segment to create a nationwide warehouse and fulfillment network supporting e-commerce operations.

The ParcelPort business will be integrated into Amware Logistics LLC as Amware Fulfillment Services. ParcelPort CEO Vincent Gulisano will join Amware as its president. Mark Wilhelm continues as CEO.

Cleveland, Ohio-based Amware operates 25 facilities in the United States and one in Canada, with over 2 million square feet of warehouse space. Atlanta-based ParcelPort provides direct-to-consumer and business-to-business order-fulfillment services, front-end e-commerce gateways, order entry/management applications, and transportation services from warehouses in Connecticut, Pennsylvania, and Arizona. It serves high-growth e-commerce and direct marketing segments such as pharmaceutical, nutriceutical, fashion accessory, and "green" home products.

What brought the two companies together, Gulisano said in an interview, was the recognition that B-to-C e-commerce fulfillment is dominated by small, single-city operations, and that Amware's and ParcelPort's complementary strengths could bring B-to-B warehousing expertise and a national structure to the fragmented B-to-C market.

"Most fulfillment companies are very small," Gulisano said. "They're really like the way 3PLs were in the '80s—smaller, regional, and operating in a fragmented market. There are no OHLs or Exels of e-fulfillment out there." Most e-fulfillment companies don't have all of the "professional controls and operating systems" in place that the B-to-B warehousing and distribution industry has developed over years of serving manufacturers and retailers, he added.

Gulisano believes Amware Fulfillment Services will create a new model for business-to-consumer logistics.

"The key is going to be taking the professional warehouse management skills of the B-to-B guys and pairing [them] with the e-commerce capabilities of the fulfillment houses," Gulisano said. "That doesn't exist out there yet on a true, national 3PL basis. The growth is going to be phenomenal over the next five to 10 years, and we want to lead it."

Sixty-year-old Amware has its roots in warehousing, transportation, and recycling, including pallet repair. ParcelPort, which launched in 2008, integrates its own order-fulfillment software with its customers' e-commerce platforms. According to Gulisano, the 3PL's software pulls customers' orders from their e-commerce systems. It then works with a warehouse management system to run pick plans that group multiple customers' orders in the most efficient way, allowing ParcelPort to meet the high-volume demand that typifies many e-commerce operations.

About the Author

Toby Gooley
Contributing Editor
Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.

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